The conceptual boundary of the digital asset industry faced sharp internal division this week after Kyle Samani, co-founder of Multicoin Capital, declared that “Web3 is dead.” In a blunt market assessment, Samani argued that the broader, highly speculative narratives surrounding Web3 have lost momentum, leaving decentralized finance (DeFi) and decentralized physical infrastructure networks (DePIN) as the only sectors retaining structural relevance.
Samani’s comments were sparked by a public exchange on X with StarkWare CEO Eli Ben-Sasson, who noted that the crypto industry is navigating a profound identity crisis. Ben-Sasson highlighted that early crypto adopters, who originally positioned the technology as an alternative to the legacy financial system, are increasingly being replaced or overshadowed by traditional banks, asset managers, and large institutions. While many view this institutional migration as validation, it has created ideological tension among veteran industry participants.
The Shift to Measurable Utility and Revenue Models
Responding directly to this shift, Samani suggested that the market’s maturation is rapidly filtering out abstract concepts in favor of networks that generate tangible economic utility. DeFi continues to capture significant capital by providing practical on-chain lending, borrowing, and trading architectures without traditional intermediaries. Concurrently, DePIN projects are successfully linking cryptographic incentives to physical use cases, orchestrating real-world resources such as data storage, wireless coverage, and computing power.
According to Samani, investor and developer attention has narrowed onto these two sub-sectors because they possess verifiable business models and active user bases. This pragmatic consolidation stands in stark contrast to earlier market cycles that heavily rewarded speculative token designs lacking clear, underlying infrastructure applications.
Hyperliquid Scrutiny Generates Industry Pushback
Capitalizing on the broader discussion surrounding platform transparency and architecture, Samani sparked a secondary debate by targeting the decentralized derivatives platform Hyperliquid. He claimed the platform appeared “just as suspicious as Binance,” implying that many historical regulatory and operational criticisms aimed at centralized venues could apply to the decentralized exchange.
The comparison drew immediate pushback from institutional investors. Mike Dudas, an investor at 6MV, rejected Samani’s characterization, arguing that the structural design of Hyperliquid differs fundamentally from centralized operations. Dudas pointed to the platform’s on-chain transparency and its token-holder-focused economic design as key differentiators. This dispute underscores the heightened scrutiny facing both centralized and decentralized trading venues as regional regulatory frameworks continue to tighten.
